Experimental analysis of farmers’ willingness to participate in carbon sequestration programmes
Julia Block, Michael Danne, Oliver Musshoff
Georg-August University of Goettingen, Dept. for Agricultural Economics and Rural Development, Germany
Agriculture can contribute to climate protection. By storing carbon dioxide from the air in agricultural soils via humus growth, farmers can counteract carbon dioxide emissions, which are the main cause of greenhouse gas emissions, and thus global warming. Since agricultural soils offer huge carbon sequestration capacity, humus certificates in the context of humus programmes were developed. The present paper investigates farmers’ willingness to participate in such relatively new and unexplored humus programmes. A special objective is to analyse whether and to what extend specific programme requirements and monetary incentives influence farmers’ willingness to participate. The empirical analysis is based on a discrete choice experiment with 150 German farmers. It was found that farmers in our sample generally do have a statistically significant preference for participating in humus programmes compared to no humus programmes. More precisely, farmers who are willing to participate in humus programmes prefer a field-specific reference value for humus increase compared to a regional average reference value. Furthermore, a higher minimum increase of humus content required for the payout of the basic premium at first control investigation leads to a decreasing willingness to participate. In contrast, a higher basic premium results in an increasing willingness of farmers to participate. Despite this, farmers decline the option of an additional premium or a repayment due to a humus increase or humus reduction at a second control investigation if there is an alternative programme with no additional premium or repayment. The study findings should be considered by policy makers and non-governmental organisations to gain insights into preferences and optimal design of carbon sequestration programmes from the perspective of farmers.
Keywords: Agricultural soils, carbon sequestration, climate protection, humus programmes
Contact Address: Julia Block, Georg-August University of Goettingen, Dept. for Agricultural Economics and Rural Development, Göttingen, Germany, e-mail: juliabarbara.blockuni-goettingen.de